* Platinum, palladium prices rally to highest since mid-2008
* Launch of new U.S. ETFs fuels investment interest
* Gold prices steady as firmer dollar curbs gains
(Updates, adds comment, changes dateline from TOKYO)
By Jan Harvey
LONDON, Jan 12 (Reuters) - Platinum and palladium prices
jumped to their highest since mid-2008 on Tuesday as the launch
of new investment vehicles in the United States fuelled buying
interest amid hopes for a recovery in industrial demand.
Gold prices were broadly flat, as a recovery in the dollar
took the wind out of a rally that took the precious metal to
five-week highs on Monday.
Spot platinum <XPT=> hit a peak of $1,624, its highest since
August 2008, and was bid at $1,617 an ounce at 1041 GMT, against
$1,591.50 late in New York on Monday. Palladium hit an 18-month
high of $439 an ounce and was later at $434 against $431.
Both metals have benefited from the launch of the first
U.S.-based platinum and palladium exchange-traded funds, which
began trading on the NYSE Arca platform on Friday.
"We have a new player on the market, and that is the new
palladium and platinum ETFs being traded in the United States,"
said Commerzbank analyst Eugen Weinberg. "We have seen strong
demand for them in the first two days of trading."
"Chinese car sales data also supported platinum and
palladium prices, because it was so strong," he added. "But I
think really demand at the moment is coming not so much from
industry but from the investment side."
More than half of global platinum and palladium demand comes
from carmakers, which use the metals in autocatalysts. Car
demand figures are therefore closely watched by PGM traders.
For a graphic showing the relationship of platinum and
palladium prices to car sales, click on:
http://graphics.thomsonreuters.com/0110/CMD_PLDPLT0110.gif.
China's auto sales surged past the United States to reach
record levels last year on government incentives, and are poised
for solid but slower growth in 2010. []
Analysts say investment buying sparked by expectations for a
recovery in car demand in 2010 could lead platinum and palladium
to outperform other precious metals this year. []
GOLD TREADS WATER
Gold prices were broadly flat as a rally which took the
metal to five-week highs on Monday was curbed by a recovery in
the U.S. dollar. The ratio of gold to platinum hit its lowest
since August 2008.
The dollar rose after China International Corp official Peng
Junming said the unit had hit bottom and had limited room to
fall further. This pushed the U.S. currency to the day's high
versus the euro and the yen. []
Strength in the U.S. unit limits gold's appeal as an
alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies.
Traders are awaiting further clues as to the direction of
U.S. interest rates. The Federal Reserve is likely to lift rates
when clearer signs of economic recovery emerge, which will
benefit the dollar and consequently pressure gold.
"We believe the U.S. dollar and investor inflows into gold
will become less constructive for the gold price in the first
half of this year," said Deutsche Bank in a note. "The U.S.
dollar tends to do well in anticipation of Fed rate hikes."
Other commodities also suffered from the dollar's rebound,
with crude oil declining nearly 0.5 percent towards $82 a
barrel. Gold tends to track crude prices, as the metal can be
bought as a hedge against oil-led inflation. []
Spot gold <XAU=> was at $1,152.35 an ounce versus $1,151.10
on Monday. Silver <XAG=> was at $18.62 an ounce against $18.55.
In percentage terms, silver has been the best performer of
the precious metals so far this year, up 10.9 percent against
gold's 5.3 percent rise, a 10.3 percent gain in platinum and
palladium's 7.3 percent climb.
"The next major topside resistance is $19.46, the 2009
high," ScotiaMocatta said in a note.
(Editing by Sue Thomas)
